An Art to Holiday Trading?

Yippee!  This will be a pre-holiday week.

And around here we look forward to such events because markets usually firm up ahead of holidays, although in the final hours of the lead-in to the holiday, there are also those who get cold feet and won’t hold through the holiday because of perceived risks.

That said, ideally this week would see a solid market rally, through Thursday, or so – along with some fresh market highs  – and then a slight decline on Friday as the cowards of the Hamptons bail out being risk-averse as many are.

(Continues below)

 

News to drive the market this week should be pretty good, too.

Let’s start with the two numbers out this morning:  The first is Durable Goods orders:

New Orders New orders for manufactured durable goods in May decreased $2.5 billion or 1.1 percent to $228.2 billion, the U.S. Census Bureau announced today. This decrease, down two consecutive months, followed a 0.9 percent April decrease. Excluding transportation, new orders increased 0.1 percent. Excluding defense, new orders decreased 0.6 percent. Transportation equipment, also down two consecutive months, drove the decrease, $2.7 billion or 3.4 percent to $75.4 billion.

Shipments Shipments of manufactured durable goods in May, up following two consecutive monthly decreases, increased $1.8 billion or 0.8 percent to $234.9 billion. This followed a 0.3 percent April decrease. Transportation equipment, up following four consecutive monthly decreases, led the increase, $1.5 billion or 1.9 percent to $78.8 billion.

Unfilled Orders Unfilled orders for manufactured durable goods in May, down following two consecutive monthly increases, decreased $2.3 billion or 0.2 percent to $1,120.1 billion. This followed a 0.2 percent April increase. Transportation equipment, also down following two consecutive monthly increases, drove the decrease, $3.4 billion or 0.4 percent to $762.8 billion

The second is the Chicago Fed National Activity Index – CFNAI – and it also failed to trumpet the end of the world:

“Led by declines in production-related indicators, the Chicago Fed National Activity Index (CFNAI) moved down to –0.26 in May from +0.57 in April. Three of the four broad categories of indicators that make up the index decreased from April, and three of the four categories made negative contributions to the index in May. The index’s three-month moving average, CFNAI-MA3, declined to +0.04 in May from +0.21 in April.

Futures up 72 by the Dow…

Which gets us to sizing up the rest of the week, starting with Housing from Case-Shiller (S&P, Corelogic, and the pizza guy wandering by).  We don’t expect a downside surprise because it is summer – prime time for house deals.  And because of the low rate on the mortgages.

This latter is something of a problem, however.  Since the Fed supposedly raised at their last meeting, you sure couldn’t prove it by the interest rate on the CBOE-traded 10 year Treasury.  See here for a chart.

Don’t worry if the chart looks all red – just means today’s trading isn’t up yet.  So go on and click a 1-year view.

What you see here is what I think my deflationist pal (Dr. Jas Jain) would likely circle as a mere bounce on the way to the ultimate long-term long wave washout in the Greater Depression to come.

His view (bottom not in, fake-out stock rally in play) is supported by clicking max – the long term view of the 10-year – over here.

Our bottom lines are similar.  I’m having fun playing the last of the highs which could continue (ideally) to the August 21-24 period.  And from there we will site back in an initial mix of 3X bear ETF’s initially, and then – before it becomes too obvious – we will roll into reasonably priced put options for the year-end or early 2018 period.

All of this is discussed in a lot more detail on the www.peoplenomics.com site which is less interested in politics and much for focused on quality of life, bang for the bucks you have, and keeping a step ahead of the wolf.

Misguided MMT?

The REAL story in finance – which no one is bothering to report – is how the US Fed is running a marvelous experiment in Modern Monetary Theory.  The short Wikipedia of it is:

Modern Monetary Theory (MMT or Modern Money Theory, also known as Neo-Chartalism) is a macroeconomic theory which describes and analyses modern economies in which the national currency is fiat money, established and created by the government. The key insight of MMT is that “monetarily sovereign government is the monopoly supplier of its currency and can issue currency of any denomination in physical or non-physical forms. As such the government has an unlimited capacity to pay for the things it wishes to purchase and to fulfill promised future payments, and has an unlimited ability to provide funds to the other sectors. Thus, insolvency and bankruptcy of this government is not possible. It can always pay”.[

The Wikipedia entry which mostly ascribes magical properties to MMT is that at some point, a realization comes to people that their money has been hollowed-out.

As of this morning, the U.S. Dollar has only 4% of the purchasing power it had in 1913 when Congress threw in with the banksters.

What we spend on a steak dinner today ($25, not a Ruth’s Chris, lol) would have bought TWENTY-FIVE such dinners in 1913.

The deal with the monetary devils is while maintaining full employment may sound peachy – as does the rest of the Fed’s dual mandate, the facts suggest someone ought to have mentioned retaining purchasing power might have been a useful deal point.

But such deals, Jekyll Island, and all that,, which leaves me (at last) at the point:

We can see in the M2 Money Supply figures (up 6% in the past year) evidence of DEFLATION running about 4%.

Any fool (which ought to include most economists, but seemingly doesn’t) ought to be able to figure that If CPI inflation is only one-third of monetary inflation.

The Consumer Price Index for All Urban Consumers (CPI-U) decreased 0.1 percent in May on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 1.9 percent.

In other words, since we can see 6% more money sloshing about, but prices are up 1.9%, then deflation is really (6-1.9=) 4.1%.

As long as there is plenty of money for loans, and as long as consumers don’t all sober up en masse one morning, everything will go fine here in the financial Titanic.

But mass awakenings have happened before.  Around 1637 – when Tulip Mania ended and in 1920-1921 when the Weimar Republic was forced to pay off war reparations they could ill-afford and so they just printed to oblivion.

The result of current Fed policy is the velocity of money has never been lower…not in our lifetimes, and not in the Great Depression, so we have to respect the wildly deflationist point of view and remember to take off the print-colored glasses now and then.

Global bankers warn next global crash could arrive with a vengeance” is making the rounds today.  Gee, wonder where I’ve heard that kind of talk?

Move Over S&P 500…

Time Inc, Barclays to launch Fortune 500 stock indices.

Here Comes the Lynch Mob

A fine example of how sometimes the real news gets buried is going on before our eyes.

As we see it, the real story involving someone named Lynch is reflected in a couple of articles in the NY Post: For instance:

Schiff: Possible Lynch meddling in Clinton email probe makes me ‘queasy’.

But the BIGGEST deal out of the Post this weekend was the revelation that the Trump-Russia story is looking more and more like the DNC was involved as they report: “Sketchy firm behind Trump dossier is stalling investigators.”

As we’ve said (I’ve lost track of how many times) this looks more and more like a dissention psy-op run by the Obama government-in-exile, et al.

The NY Times, which was quick to question Trump and slow to question Clinton is still soft-peddling with “Senate Panel Seeks Details on Lynch Role in Clinton Inquiry.

OK, break, full-stop.

How does this relate to my assertion that the Lynch news is getting buried?

Well, a Google News search lead result is how ‘Twin Peaks’: David Lynch Upstages Nine Inch Nails With Sprawling …

Second place story was how Broncos’ Paxton Lynch making push for starting QB.

In fairness to Google, David Lynch and Paxton Lynch both have higher search scores…but my, ain’t that one to notice on the way by?

I can hardly wait for the Lynch-Clinton talk on the airplanes in Phoenix to come around again…

Healthcare Deal by the Fourth?

CNN thinks not: For different ideological reasons, two GOP senators say getting the bill passed by July 4 is unlikely.

Twilight of Free Speech

Pennsylvania man told to stop playing ‘Taps’ outside his home every night.

Comments

An Art to Holiday Trading? — 14 Comments

  1. Regarding ‘unwanted sounds’ in an environment – some cities have control over the amount of sounds that trains produce (i.e. whistles, etc.) as they can disrupt sleep at night . . . in certain areas.
    Having lived in a rural setting where the railroad was close by . . . well, the romance of a train whistle pales quickly at 2 A.M.

  2. George, on my first read-through I saw “Neo-Charlatanism” rather than “Neo-Chartalism”!
    Several years ago, when I first started reading about financial subjects, a brilliant person posting at ZH wrote: “Live by debasement, live in de basement”… sometimes, I think I could have quit reading, right there…

    • Yeah – ain’t that a hoot. I’ve been posting the DATE now for dsix months on the public side, longer on Peoplenomics and NOW people are figuring it out.

      Is the whole world on Paxil or Zoloft?

      • At least not the people in Venezuela any more. They’ve woke up every day in a dystopia for years now. In an interview with Lynette Zang of ITM Trading the few down there that have any assets left have been selling collectible coins through them and others for “hard” currency after she said monetary gold was confiscated – https://www.youtube.com/watch?v=sVG7tDQClik.

  3. Im hearing on the radio that the Trump administration has given a line in the sand to Assad. They claim there’s intelligence saying Assad is planning on doing a chemical attack. Sounds like Trump is fully on board with the neocon agenda. This isn’t what I voted for.

  4. Teach Me Tonight starting with the ABC of it right down to the XYZ of it
    HOW TO TRADE OPTIONS

    • One more thing. Although we recognize and have a sense of pride about America’s history and where we been, like our music, we do so as a template of how to conduct ourselves as it relates to the future growth if this country. America has made mistakes, and we should learn from them. But overall, America has done a lot right. And tonight as I go to sleep listening to church bells, trains, chants and hopefully a military bugle, I will think of those poor souls that don’t realize that it’s these sounds that make us great. The people that complain about crap like this, can’t appreciate life, because they don’t have one themselves.

  5. George,

    One of the pleasures of living next to a U.S. military installation [as I have for the past two decades] is every morning hearing Reveille followed by The Star-Spangled Banner at sunrise [currently 7am], and finishing the day with the ever-poignant Taps at dusk [currently 9pm]. The music blares loudly and clearly from a
    30″ yellow speaker horn that rotates on a
    high mast – which is also used to sound that ominous tornado siren many of us are unlucky enough to know and sometimes, fear.

    But: there is never any fear when I hear those timeless notes echoing across the 10-acres of urban pasture outside my back door – quite the contrary. That music always stops me in my tracks -regardless of other distractions- and I feel a sense of well-being and yes, a measure of pride that here -in my home- I have dedicated men and women
    nearby whose only concern is the protection of all that I hold most precious. And, I’m not ashamed to admit that on a few
    occasions when our nation was facing global crisis, those bugles and majestic orchestra have moved me to tears.

    That a citizen would be accused of violating a noise ordinance by playing a 90-second tribute to our nation and its military is indicative of the intolerance that is flooding our land and it is just another mallet blow chipping away at personal freedom and a genuine love of our country. Instead of a foolish restriction, that Pennsylvanian patriot should be rewarded with a bigger amplifer. I just hope he really cranks it up to the max next week on the 4th of July and dares that shortsighted City Council to tell him to turn it back down!

    In fact, I may just move my soundbar out to the front porch and blast my complex with some authentic John Philip Sousa marches, some recorded onto wax cylinders over 100 years ago by the maestro himself as he conducted U.S. Marine Corp Band – “The President’s Own”. JFK once said hearing that majestic band play was his favorite part of being President. Those old recordings may not have the full fidelity of the digital age, but they still pack enough punch to stir a man’s soul!

    On two discs I have 30 marches and songs; more than enough to infuriate any passing Democrat as they are reminded of what our nation was, is and always shall be regardless of their petty attempts to wrest it from the hearts of loyal citizens like Joshua Corney, of Glen Rock, Pennsyvania.

    • You and I agree – but let’s see how ol’ Jon lets loose on this…no telling what the left thinks of wake ups, or sleep downs, or church bells, and all that other damn Americana that was part of our former greatness.

      But someone with a boom box, eau de roach, hydraulics and out of area license plates with a gun…Oh must protect, lol

      • You both are lunatics looking to just pick a fight because of your perception that all people with a liberal viewpoint are somehow commie pigs.

        To the contrary you oldsters. I love the sounds of reverie, Stars and Stripes, Star Spangler Banner, etc. It is comforting. The same with Church Bells, the sound of a distant train, the gong and chants of the local Buddhist temple, the friendly screams of children playing at recess, or the whistles during a soccer match or football game. I hear all of these sounds and they are what makes America great NOW.

        The thing is, I represent and salute what real Americans ought to be like. My generation is the inclusionary generation. We have very few biases, yet detest those who do.

        We welcome the sounds of a diverse America. Not only the aforementioned sounds, but yes, American music, not from Boomboxes however. Those went out of style 20 years ago. Our music is from our phones and played via our wireless headphones, so as not to distract. And our music style is a salute and nod tobhistory, from Sinatra to Basie to the Stones To Tupac to Twenty One Pilots and beyond.

        We live with our eyes to the future. My baseball coach had a poster in the locker room from Satchel Page that said. “Don’t look back, someone may be gaining on you”. That perfectly sums up my generation. You oldsters want to MAGA. That means you want an old America, rooted in the past. Well, my uncle always said, those that live in the past, have no future. And that is why you all are stuck, praising a President that you think somehow is going to bring America back to the past, but with no plans or strategies of how it will affect our future.

      • Supreme Court rules in favor of Trump – lol
        All 8 judges in fact

        You lefties are a hoot. You make nice house pets. Easy to train.